Stocks rebound on Fed debt program, oil recovers
A gauge of global equities rebounded on Monday after the Federal Reserve widened its program of buying corporate debt, while crude oil rose on signs fuel demand is recovering and as investors grapple with how to assess the economic reopening.
Stocks jumped after the Fed said its secondary market corporate credit facility would now include an indexing approach to account for all U.S. corporate debt that satisfied minimum rating, maximum maturity and other criteria. The purchases, which will start on Tuesday, will complement the other asset purchases made by the facility, which began buying shares of broad-based exchange-traded funds in mid-May.
“The Fed just wants to make sure there’s plenty of liquidity in every market,” said JJ Kinahan, chief market strategist for TD Ameritrade in Chicago. “In theory it should help keep liquidity in the markets.”